Taxpayers Get Scammed on Chevy Volt Tax Credit?

On Friday night, I discussed the appearance that GM dealers are gaming the Chevy Volt tax credit on Fox Business Network's "Follow the Money" show with Eric Bolling. Here's a transcript:

Eric Bolling: Outrage alert. Former Saturn dealer, Mark Modica says there is something rotten in the business of marketing and selling the Chevy Volt. He claims he uncovered underhanded shenanigans that make the Volt appear to be a success story. Mark is here with us right now. Ok, Mark, tell us what happens. Dealers are selling to each other to grab that tax incentive.

Mark Modica: Hi Eric. Yes. What I did, was I did a search on some websites to check the availability of Volts. GM was claiming that demand was exceeding supply and that there was not enough out there. What I found was that there is plenty out there including six of them within seventy miles of my location. But then I uncovered something more disturbing. There was actually a bunch of used ones being sold. One in particular was at a KIA dealer where they had four of them in California one with eleven miles one with thirty miles sold as used. So what they are doing is, they are titling the vehicles, one dealership buying them from another, taking that $7,500 tax credit that they are allowed, and then reselling them at MSRP. They are not reducing the price. They are looking to game the system.

Eric Bolling: So as the price of gasoline goes up and maybe the demand for the electric car goes up a little bit. They are realizing they don't have to offer that seventy five hundred dollar tax credit anymore. They are keeping it for themselves?

Mark Modica: No, not at all. Demand? I don't think that demand is there. You have to look at what this car does, Eric. It gets about thirty miles on the charge and then gets about thirty miles per gallon on premium fuel. So you are not saving a lot of money there.

Eric Bolling: They are just not selling. They are just sitting on lots. Just sitting on the Ebay sites, without being sold?

Mark Modica: That is how it appears to me. But it looks like these dealerships are trying to get some money by at least getting the tax credits...

Eric Bolling: Right. Right.

Mark Modica: ...and then still hoping to sell them at full price.

Eric Bolling: Mark, I am going to get back to you in a second. Dr. Heldman, here is another situation where all of the intentions may have been great for the Obama Administration offering seventy five hundred dollar tax credit for buying an electric vehicle. That may have been right. But they forgot to write in the part, only to the consumer, not to the dealer.

Caroline Heldman: Well, yeah, this is egregious and shame on Chevy for doing this. This is ridiculous. But we have to hold our public, elected officials accountable but even more so, corporations, because they are profit seeking organizations, which means they will try to scam systems. And right now they are trying to scam the American taxpayer.

Eric Bolling: Go ahead, Adam.

Adam Geller: Hey, corporations are profit making centers. The problem is the elected officials. Listen, they should have known that corporations are going to find every loophole...

Eric Bolling: But let's be honest though guys. Lets clear this up guys.

Adam Geller: ...they have to write better legislation.

Ainsley Earhardt: We have responsibility though as citizens...we can't blame it on the government.

Adam Geller: Listen, listen.

Eric Bolling: Ainsley, we can't point the finger at GM on this one. Mark, let me get back to you in a second. These are the individual dealers selling it back to each other, gaining that seventy five hundred dollar tax credit.

Adam Geller: Wait a minute.

Eric Bolling: GM may not even know about it.

Adam Geller: They are completely wrong. On that there is no question. The problem is that they are taking advantage of a loophole that should not exist in the first place.

Eric Bolling: Absolutely.

Adam Geller: There is a problem in the legislation. That is my point.

Ainsley Earhardt: In laymans terms, if you are at home and you do not understand what is happening, let me explain it to you. I own a car dealership, a Chevy dealership, that is allegedly doing wrong. I own a car, you own a dealership, Eric. I sell you a car. I get the seventy five hundred dollars and you sell it back to me...

Eric Bolling: Just transfer the title.

Ainsley Earhardt: ...then I sell it back to you. And every time we sell it back and forth...

Eric Bolling: Just once. Only one time, the first time.

Ainsley Earhardt: ...all right, but you get a seventy five hundred dollar rebate.

Eric Bolling: The whole point, Mark, the whole point was to get this to the consumer, right? Clearly these tax dollars are not going to the consumer.

Mark Modica: Well, they are not supposed to, and that bring up another point. If you go into a dealership and buy a Volt with thirty miles on it, you think you are buying it new. I have looked over that tax form to take that seventy five hundred dollar credit and there is no identifier on there of the vehicle. So you may have the taxpayer getting scammed out of...They may take the $7,500 too.

Eric Bolling: Are you saying that GM is complicit in this?

Mark Modica: GM? No. I don't think GM knows about this.

Eric Bolling: Ok, so it is just the dealers.

Mark Modica: This is the dealerships and the Obama Administration, with their tax code of trying to have good intentions.

Eric Bolling: Clearly. Clearly, that is it. With all good intentions, you have got to tie up the loopholes or else they are going to be exploited. I am going to say thank you for Mark Modica being here with us tonight.